Whatwould U do ?

[Paradise]

The mission:
You've taken over a parts department behind a manager who has been heavily purchasing parts from a dealer wholesaler. Your inventory $$ have exceeded the dealer's limit which is fairly liberal. However..because of purchasing outside, you have minimal $$$ in return allowance..the dealer wants you to rapidly turn the inventory around. The techs are now more than acclimated to getting what they want..NOW...no flow of daily ordering or stock order.
So here you sit. Staring at a department stuffed with parts purchased outside. You need to rapidly unload them to turn the inventory around. You need to get the service department acclimated to factory purchasing, daily orders..a workable schedule without causing turmoil.
How would you handle this scenerio?

[Chuck Hartle]

We see this day in and day out. First of all, the only way to change the negative process is to show the dealer what is happening, what is needed in the long term, and have a good business plan to present to the dealer and the service manager.

If the dealer is not willing to change the bad habits that have probably produced a lot of obsolescence and expects a miracle turn around, I would suggest that you look for another opporunity elsewhere.

Inventory problems do crop up overnight, they are cultivated over a long period of time. To correct the situation and change the process, it won't fix itself overnight, unless you are willing to throw it away and write it off. Remember, also, if you change a process today in your parts inventory control, it will take 7 to 12 months before you begin to see results on management reports. Patience is the key and dealer acceptance is a must. Good luck....

Chuck Hartle'

[DMuller]

I'm assuming that you work for a GM dealer and my advise would mainly apply if you are. You can start by implementing daily DRO's. Stop buying stock orders from outside venders. When placing your daily stock order (DRO)and customer special orders (CSO) from GM use "special instruction code" 3. This will give the maximum return allowance of 9.75%. As far as the emergency orders for the shop go. I believe that you can still provide same day service via outside venders to keep the shop flowing with good productivity. Don't get into a battle with the service department over your situation. They are still your best customer and need your support. Not to mention you probably would not get any support from the Dealer to reduce your level of service to the shop. The more productive the shop is the more productive and profitable the parts department becomes.

Hope this helps.
Dan

[Robert a Bamert jr]

You should be happy in that fact you have no place to go but up...I walked into the same situation 5 yrs ago @ my location you can really shine now if you just choose your moves carefully. You do need to sign up for the CFI Customer Focus Incentive Program ask you APM about it so you can earn more Reserve, and filter out the aftermarket during Inv. each year, best time to make the dealer write alittle off. You should look forward make a five year plan for starters. what do you want that dept. to look like and run like for your goal and just do one thing a day or a month , or yr towards that goal. it adds up quickly....

[sallen1]

I wouldn't discount the dealer-wholesaler right away. What is your pricing program? We have guys that will deliver truck-load priced engines for 5% premium which saves us about $500 from a mfg. order, saves lots of time, and they bring the motors to us. We charge a pack on these ($200) to help with the decreased return reserve. Some wholesalers must move their stuff and could be the best price even taking the reserve, et. al. in to account. But that's about it, we don't buy much else from them.

Another idea: Is there a WD near you? We use AC-Delco supplier who delivers 3x per day if needed. We earn a 'reserve' credit from them based on purchases and have always been pleased with the service. I'd recommend this company to anyone (they are in So. Cal.).

[kenm]

depending on the discount level you are getting from your w/d you could agree to purchase at dealer cost and get the difference in the form of a check. Then apply the check against the inventory and scrap old inventory. I would use this for non-returnable parts. I would also start using the max return allowance on GM DROs'.
It will take a while, but it is fixable, I hope your dealer is patient.

[Farfinator]

Mornin' Paradise,
What is the stuff? Does it have history? Is the excess in breadth or depth? Is it junk special orders or fast moving, useable stuff in excess?
Is there a reason you don't think you can satisfy tech demand? What problems have you found with the stocking criteria such that demand has not been met?
Have you investigated offing excess to a big wholesaler at a discount?